Correlation Between 159681 and Kunwu Jiuding

Can any of the company-specific risk be diversified away by investing in both 159681 and Kunwu Jiuding at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining 159681 and Kunwu Jiuding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 159681 and Kunwu Jiuding Investment, you can compare the effects of market volatilities on 159681 and Kunwu Jiuding and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in 159681 with a short position of Kunwu Jiuding. Check out your portfolio center. Please also check ongoing floating volatility patterns of 159681 and Kunwu Jiuding.

Diversification Opportunities for 159681 and Kunwu Jiuding

0.85

Correlation Coefficient

159681  Kunwu Jiuding

Very poor diversification

The 3 months correlation between 159681 and Kunwu is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding 159681 and Kunwu Jiuding Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kunwu Jiuding Investment and 159681 is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on 159681 are associated (or correlated) with Kunwu Jiuding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kunwu Jiuding Investment has no effect on the direction of 159681 i.e., 159681 and Kunwu Jiuding go up and down completely randomly.

Pair Corralation between 159681 and Kunwu Jiuding

Assuming the 90 days trading horizon 159681 is expected to generate 1.32 times more return on investment than Kunwu Jiuding. However, 159681 is 1.32 times more volatile than Kunwu Jiuding Investment. It trades about 0.12 of its potential returns per unit of risk. Kunwu Jiuding Investment is currently generating about 0.02 per unit of risk. If you would invest  71.00  in 159681 on September 25, 2024 and sell it today you would earn a total of  25.00  from holding 159681 or generate 35.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

159681  vs.  Kunwu Jiuding Investment

159681

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in 159681 are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, 159681 sustained solid returns over the last few months and may actually be approaching a breakup point.

Kunwu Jiuding Investment

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kunwu Jiuding Investment are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Kunwu Jiuding is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with 159681 and Kunwu Jiuding

The main advantage of trading using opposite 159681 and Kunwu Jiuding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 159681 position performs unexpectedly, Kunwu Jiuding can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Kunwu Jiuding will offset losses from the drop in Kunwu Jiuding's long position.

The idea behind 159681 and Kunwu Jiuding Investment pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.